Fix this: The labyrinth of MOHELA and student loan relief

By Kathleen White

I was just 16 years old when I enrolled at San Francisco State University, and as the first in my family to go to college, I had to pay for it myself. I had no choice but to use financial aid: grants, scholarships and student loans.

I earned my bachelor’s degree, and by the time I got my master’s in education in 1982, I was the parent of a toddler and had another child on the way. My husband, also an SFSU student, utilized his veterans benefits, granted after four years of service as a U.S. Navy frogman; he also took out student loans.

Fast-forward to today: We have been married for 45 years and sent three sons to college. We were both proud public service employees and in a moderate- to middle-income family, so we were among the many people who needed assistance to finance college. Our sons attended college through a combination of our personal payments, earned scholarships and student loans.

Over 40 years, I have paid $305,000 in student loan payments. Student loan payments were ever-present in our lives from one generation to the next. I remain grateful for that support and am proud to say that I was never in default, despite financial challenges, and that I have always paid my debts and obligations.

Over 40 years, I have made $305,000 in student loan payments. Student loan payments were ever-present in our lives from one generation to the next.

My college education allowed me to engage in the best career I could imagine. I was employed full time as a tenured faculty member at City College of San Francisco for 26 years, teaching people interested in careers in education in a range of early childhood and K-12 settings. I served as a department chair, and over the course of my career, I taught more than 25,000 students.

The student loan labyrinth

In 2017, I learned about Public Service Loan Forgiveness, the program that discharges student loan debt for people who work in public service and have made 10 years’ worth of loan payments. I had been making payments for well over that! But when I submitted my forms to my loan servicer, Federal Loan Servicing, they didn’t even evaluate them; they said the kind of loans I had were ineligible. I was a public servant, I thought. I should qualify. But I gave up on PSLF, disappointed. And my loans seemed endless: I had $65,000 left to pay to my loan servicer. It seemed I’d have to pay $360.64 every month until 2037 — until my 81st birthday!

To make matters worse, I knew that the poorly run PSLF program was preventing my own students at CCSF— potentially future educators — from succeeding. The pervasive teacher shortages in my area could have been alleviated with a more robust PSLF strategy for students burdened with student debt.

New hope, and a long road

In 2020, student loan advocacy groups, including the AFT, began publicizing changes to PSLF, assuring borrowers that their applications would be reconsidered under the new federal administration. In 2121 I also turned 65 and chose to retire, as I had begun teaching my two elementary school-age grandchildren at home during the pandemic school closures.

I needed clarification about my status as a retiree, my PSLF eligibility, my denial of PSLF in 2017, and my eligible loan types. So I worked with my union — the AFT — and Summer, the student loan navigator — even though I had hoped that my loan servicers would do this work. I was also concerned about the interest rates and duration of a new consolidation loan if PSLF did not work for me. Would I be paying a higher monthly payment for even longer?

My loans seemed endless: It seemed I’d have to pay $360.64 every month until 2037 — until my 81st birthday!

By this time, MOHELA was handling my loans, so I followed its website instructions — including the requirement that forms had to be submitted as paper copies by mail or fax, one of many annoying details along the way. I faxed one form in September and the other in October 2022 — four years after I’d completed 10 years’ worth of payments.

I had a host of questions, but after calling and emailing MOHELA 30 times from November 2022 to March 2023, I couldn’t get any information, not even status updates. I was told to wait 30, then 60, then 90 days for processing. I was told that due to pending legislation, forms would not be addressed until after July 2023. I also repeatedly called Navient, since I’d filed for the PSLF waiver just before my loans transferred to MOHELA: No answers there either. I was in a gray area, where I belonged to no servicer and had no recourse.

I kept tracking what progress trickled through, resubmitting forms, hearing at one point that only three of my payments qualified for the 120 required, and waiting, at another point, because my transactions had to be “hand counted.” I imagined hundreds of staff working in a large warehouse filled with file boxes, counting my payments by hand!

Still waiting

Call wait times to MOHELA often exceeded two hours, with decreasing call center hours and a host of new staff “in training” who couldn’t help with complicated cases or questions. Both written and oral communications were general. Form letters did not answer specific questions, and staff were not able to accelerate individual questions or respond to specific circumstances. I filed a total of seven complaints with MOHELA, the Consumer Financial Protection Bureau, and the federal student financial aid office. I had sent a consolidation form on time, and I worked for a qualifying employer, I thought; I should have had relief by now!

Instead, when payments resumed in October 2023, after the COVID payment pause, I received a bill from MOHELA to pay $393.69 per month. I made that payment, despite having been in PSLF limbo for 12 months. It was a hard check to write.

The last leg

Finally, there was hopeful news: In November, MOHELA said I had well over the 120 payments required for PSLF. The catch? The estimated PSLF eligibility date on their letter was blank. Three days later MOHELA told me they’d placed my loan in administrative forbearance. I was concerned, as interest typically accrued during forbearance, and I had not requested forbearance. Despite my loan being in forbearance, I received bills for loan payments in both November and December. I paid both.

Finally, on Feb. 6, I received a form letter thanking me for my public service and indicating that my principal and interest totaling $29,765.97 had been forgiven. They also returned the three overpayments from October, November and December.

I taped that letter up on my front door and kept it there for weeks. I remain grateful, but it was such a painful ordeal. On behalf of every PSLF-eligible employee and especially every eligible teacher, I am here to advocate for change.

Kathleen White is a retired public community college professor and a member of the retiree chapter of AFT 2121 at City College of San Francisco. This post is based on her testimony on April 10 before the U.S. Senate Committee on Banking, Housing and Urban Affairs’ Subcommittee on Economic Policy, chaired by Sen. Elizabeth Warren (D-Mass.). For more information on MOHELA’s performance see the report jointly produced by the AFT and the Student Borrower Protection Center.

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